Anheuser-Busch prices to strong demand, is mixed in secondary; Ally, SoCal Edison hit market

By Cristal Cody and Aleesia Forni

Virginia Beach, Jan. 22 - The high-grade new issue market was somewhat less active on Wednesday compared to earlier during the week, though issuers managed to bring nearly $10 billion of supply.

Anheuser-Busch InBev Finance Inc.'s new six-part deal made up more than half of the day's total.

The $5.25 billion deal was the focus of Wednesday's session and managed to garner overwhelming demand despite a somewhat weaker tone to the market.

The company priced $300 million of floating-rate notes due 2017 to yield Libor plus 19 basis points and $1.2 billion of 1.125% notes due 2017 at Treasuries plus 30 bps.

A $250 million issue of five-year floaters was priced to yield Libor plus 40 bps, while a $1.25 billion tranche of 2.15% notes due 2019 was priced at 50 bps over Treasuries.

There was also $1.4 billion of 3.7% 10-year notes sold with a spread of 85 bps over Treasuries.

Finally, an $850 million tranche of 4.625% 30-year notes sold at 90 bps over Treasuries.

A source close to the trade noted that the deal was more than two times oversubscribed.

Ally Financial Inc. came to market with a $750 million issue of 3.5% senior guaranteed notes due 2019. The notes sold at 99.095 to yield 3.7%, or Treasuries plus 200.6 bps.

Southern California Edison Co. was also in the day's primary, pricing $300 million of one-year floating-rate mortgage bonds at par to yield Libor plus 3 bps.

The European Investment Bank was in the U.S. high-grade primary again on Wednesday, this time pricing a $3.5 billion issue of 3.25% 10-year notes at mid-swaps plus 35 bps, an informed source said.

The notes priced in line with guidance.

Looking ahead, Federal Home Loan Banks is planning to price $3 billion of two-year global bonds on Thursday.

FHLB set talk at Treasuries plus 8.5 bps on Wednesday for the issue, which will mature on Feb. 19, 2016.

Dexia Credit Local was also added to the forward calendar on Wednesday.

The bank announced plans to price a five-year issue of senior notes via a Rule 144A and Regulation S transaction.

In other market action, JMP Group Inc. set talk for its proposed sale of seven-year senior notes at 7.25% to 7.5%, according to an informed source.

Investment-grade bond spreads ended mostly flat on Wednesday, according to market sources.

Anheuser-Busch InBev Finance's short-dated notes firmed about 1 bp in aftermarket trading, while the 10-year and 30-year tranches of notes eased 1 bp to 2 bps, according to a trader.

Ally Financial's 3.5% notes due 2019 edged higher in the secondary market, a source said.

Anheuser prices tight

Anheuser-Busch priced $5.25 billion of senior notes (A3/A/A) in six tranches on Wednesday, according to a market source.

The company's sale included a $300 million tranche of floating-rate notes due 2017 priced at par to yield Libor plus 19 bps.

A fixed-rate tranche of $1.2 billion 1.125% notes due 2017 sold at Treasuries plus 30 bps.

There was also a $250 million issue of five-year floaters priced at par to yield Libor plus 40 bps.

Anheuser-Busch also priced $1.25 billion of 2.15% notes due 2019 at 50 bps over Treasuries.

A $1.4 billion tranche of 3.7% 10-year notes was sold with a spread of 85 bps over Treasuries.

Finally, $850 million of 4.625% notes due 2044 sold at 90 bps over Treasuries.

All fixed-rate tranches priced tight of talk.

In the secondary market, Anheuser-Busch InBev Finance's 1.125% notes due 2017 firmed to 29 bps bid, according to a trader.

The tranche of 2.15% notes due 2019 headed out at 49 bps bid, 46 bps offered.

Anheuser-Busch InBev Finance's 3.7% notes due 2024 eased 1 bp to 86 bps bid, 81 bps offered.

The 4.625% notes due 2044 widened to 92 bps bid, 87 bps offered.

There is a guarantee by Anheuser-Busch InBev SA/NV, Anheuser-Busch InBev Worldwide Inc., Brandbev Sarl, Brandbrew SA, Cobrew NV and Anheuser-Busch Cos. LLC.

The bookrunners are Bank of America Merrill Lynch, Barclays, Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and RBS Securities Inc.

Proceeds will be used for general corporate purposes.

EIB brings $3.5 billion

The European Investment Bank priced a $3.5 billion issue of 3.25% 10-year notes (Aaa/AAA/AAA) to yield mid-swaps plus 35 bps, according to an informed source.

The notes priced in line with guidance.

Pricing was at 99.619 to yield 3.259%.

Barclays, Deutsche Bank Securities and Goldman Sachs & Co. ran the books.

Proceeds will be used in the general operations of the EIB, including disbursements of loans.

The lender for the European Union is based in Kirchberg, Luxembourg.

Ally sells crossovers

Ally Financial priced $750 million of 3.5% five-year senior guaranteed notes on Wednesday at 99.095 to yield 3.7%, according to a syndicate source and an FWP filed with the Securities and Exchange Commission.

The notes (B1/BB/BB) were sold with a spread of Treasuries plus 200.6 bps.

Pricing was at the tight end of talk.

Ally Financial's 3.5% notes due 2019 rose in aftermarket trading to 99.125 bid, 99.375 offered, a trader said.

Barclays, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and Deutsche Bank Securities are the joint bookrunners.

The Detroit-based automotive lender plans to use the proceeds for general corporate purposes and the redemption of outstanding debt securities.

SoCal Edison mortgage bonds

Southern California Edison priced $300 million of one-year floating-rate first and refunding mortgage bonds (A1/A/A+), series 2014A, at par to yield Libor plus 3 bps, according to a market source and an FWP filed with the SEC.

The notes may not be redeemed prior to maturity.

Citigroup Global Markets and U.S. Bancorp Investments Inc. were the joint bookrunners.

Proceeds will be used to repay commercial paper borrowings and for general corporate purposes.

The electric utility is based in Rosemead, Calif.

FHLB sets talk

Federal Home Loan Banks has set talk for its planned $3 billion offering of two-year global bonds at Treasuries plus 8.5 bps, according to market sources and a company news release.

The issue is expected to price on Thursday, and the bond will mature on Feb. 19, 2016.

HSBC Securities (USA) Inc., Morgan Stanley and TD Securities (USA) LLC are the lead managers.

Seven co-managers and a distribution group will complete the syndicate team.

Federal Home Loan Banks are 12 government-sponsored funding providers.

JMP eyes offering

JMP Group set talk for its planned offering of senior notes due January 2021 at 7.25% to 7.5%, according to an informed source.

Keefe, Bruyette & Woods Inc., Jefferies LLC and JMP Securities LLC are the joint bookrunners. Sterne, Agee & Leach, Inc. is a lead manager.

Gilford Securities Inc. is the co-manager.

The $25-par notes will be callable beginning in January 2017 at par plus accrued interest, according to a 424B5 filed with the SEC on Wednesday.

Interest will be payable quarterly.

Proceeds will be used for general corporate purposes.

The notes are expected to be listed on the New York Stock Exchange.

JMP Group is a San Francisco-based investment banking and alternative asset management firm.

Dexia planning five-years

Dexia Credit Local is planning to price a five-year issue of senior notes, according to an informed source.

The bank has mandated Barclays, Citigroup Global Markets, JPMorgan and Morgan Stanley to lead the Rule 144A and Regulation S deal.

The regional bank, focusing on sustainable development, is based in Brussels.

Bank/brokerage CDS costs rise

Investment-grade bank and brokerage CDS prices rose, according to a market source.

Bank of America Corp.'s CDS costs eased 1 bp to 77 bps bid, 80 bps offered. Citigroup Inc.'s CDS costs rose 1 bp to 72 bps bid, 75 bps offered. JPMorgan Chase & Co.'s CDS costs eased 1 bp to 66 bps bid, 69 bps offered. Wells Fargo & Co.'s CDS costs were flat at 40 bps bid, 43 bps offered.

Merrill Lynch's CDS costs widened 1 bp to 79 bps bid, 84 bps offered. Morgan Stanley's CDS costs rose 1 bp to 86 bps bid, 89 bps offered. Goldman Sachs Group, Inc.'s CDS eased 1 bp to 89 bps bid, 92 bps offered.

Paul Deckelman contributed to this review.

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